Planning for an upcoming wedding is an overwhelming ordeal. California couples spend hours upon hours selecting the right venue, picking the perfect date, sending out invitations and planning every last detail of their perfect day. Few, however, look ahead to something else they may want to plan for -- property division in the event of a divorce down the line. Although prenuptial agreements may feel distinctly unromantic, having one can help couples who must later traverse through the emotionally-fraught divorce process.
A divorce late in life for some seniors means that, after many years together, they have grown apart from their spouses and decided to move on alone. While the split may be amicable, both sides need to understand the importance of property division during the divorce. Older couples in California and other states should consult with an attorney and financial consultant to understand the specific rules for dividing assets.
IRA accounts have become a huge bargaining chip in divorce settlements, but what about IRAs received in an inheritance from a family member? Considering the new tax laws that go into effect in 2019, pretax funds from IRAs could be used to make up for tax deductions in a divorce settlement. Residents in California and other states have used inherited IRA accounts to satisfy property division in a divorce.
Some couples who divorce later in life can run the risk of endangering retirement for themselves. Studies show that divorces among young people are less common, but for those 50 and older, the rate has nearly doubled, and it has nearly tripled for those 65 and older. In California and other states, the property division of 401(k) accounts, IRA’s and pensions can potentially come with healthy associated costs during a gray divorce. So planning ahead and carefully proceeding through this period could prove invaluable to one’s future best interests.
An MGM mogul who passed away in 2015 donated the bulk of his estate to assorted charitable organizations. Worth several billion dollars, the estate was to be dispersed within three years of the mogul's death. However, the fallout from the man's past love life and four marriages are keeping the estate hanging in limbo. In California, it may fall upon the courts and a judge to determine the property division of the estate.
Statistics show that married couples are in debt with mortgages, cars, credit cards and student loans. Owing money is hard enough to cope with when all is well on the home front, but things can turn ugly fast during a divorce. In California, couples will need to discuss asset and property division, including how to separate debts.
Financial missteps during a divorce can have long-term effects if not properly thought through. Along with the emotional turmoil of divorce, financial mistakes can be even more devastating. This is especially important when it comes to property division in California.
It is believed that an estimated 40 to 50 percent of marriages end in divorce, and the number for adults over the age of 50 has doubled. California being a community property state can make property division complicated and costly. In some cases, assets take precedence. Reports have shown that the only thing more devastating than divorce for couples over 50 is the death of a spouse.
Until recently, if someone suggested a prenuptial agreement to his or her intended spouse, it may have raised questions of trust or filled one spouse with the fear that the other expected the marriage to be doomed. Fortunately, the idea of signing a prenuptial agreement is no longer the scary deal-breaker it once was. In fact, many young couples in California are finding that, aside from protecting themselves during property division, a prenuptial agreement is a way for them to protect each other.
Since California is a community property state, the law considers all of the property you and your future spouse own as part of the marital estate in a divorce. Should your marriage not last for any reason, the court will begin the property division portion of your proceedings with the assumption that you both own everything jointly. If you and your intended spouse want to change that assumption, you may want to consider a prenuptial agreement.